Information Financial system has printed an article expressing shock at Jeunesse accepting orders from Chinese language residents.
As beforehand reported, earlier this 12 months over 1 / 4 billion price of Jeunesse merchandise had been seized by Chinese language authorities.
Jeunesse’s President of Better China, Robin Lee (cited by KE as “Li Weixing”), was arrested in Might. Along with Li
two Jeunesse China market leaders Zhao and Wang had been arrested by the Chinese language police.
The present standing and/or final result of those instances stays unclear.
KE studies that following these developments,
Jeunesse’s US headquarters introduced that it will not function in mainland China.
I went in search of this announcement however couldn’t discover it. I’m assuming it was probably printed in Chinese language.
KE studies that regardless of all of this, Jeunesse promoters in China proceed to advertise and run the enterprise.
Beneath such circumstances, there are nonetheless numerous Jeunesse distributors who, conscious of every thing, flip a deaf ear to Jeunesse and proceed to market Jeunesse as an entrepreneurial platform by which one can notice their goals.
These distributors take into account these unwilling to proceed to advertise Jeunesse as “traitors”, going as far as to verbally abuse and siege (?) them.
Jeunesse doesn’t have a Chinese language direct promoting license. Nor are its product accepted for distribution or sale in China.
As per KE’s studies that, amongst different issues, this is because of Jeunesse not desirous to pay taxes on distribution of their merchandise all through China.
A Jeunesse vendor who didn’t need to be named instructed our reporter: “Jeunesse invited three waves of individuals to function in the course of the licensing course of, but it surely price some huge cash however nothing was accomplished.
Subsequently, Jeunesse misplaced their confidence and easily gave up on the license.”
Jeunesse apparently first circulated its intention to register in China again in 2012.
On high of this 12 months’s seizure, final 12 months Chinese language authorities seized 4 billion RMB (~$605 million USD) price of Jeunesse merchandise.
When you’re questioning how Jeunesse merchandise make their method into China, they’re smuggled.
Based on the Guangzhou Customs Anti-Smuggling Bureau, Jeunesse’s merchandise haven’t obtained the corresponding gross sales {qualifications} for meals, medication, and well being merchandise in China, to allow them to solely enter China by smuggling.
Whereas which may sound like one thing outdoors of Jeunesse’s management, take into account all gross sales are tracked at Jeunesse’s US headquarters.
It appears fairly inconceivable that no person in Jeunesse company is ready to observe a whole bunch of tens of millions of {dollars} of Jeunesse merchandise.
In interviews with our reporters, Jeunesse distributors typically acknowledged that gross sales within the Chinese language market accounted for greater than 70% of Jeunesse’s world efficiency.
The revenue that Jeunesse receives on these gross sales (which they obtain whether or not the merchandise are seized or not), brings about an unbelievable battle of curiosity.
One other take is that it merely occurs out within the open.
It’s understood that though Jeunesse has an organization in mainland China, its market operations usually are not dealt with by this firm.
As an alternative Jeunesse claims to be a cross-border e-commerce platform that allowed distributors to register and recruit members on Jeunesse’s US web site.
After fee and transport particulars are offered, Jeunesse ships the merchandise to Hong Kong. The merchandise are then transferred to distributors and members within the mainland by third-party logistics.
Not solely does this increase suspicion of smuggling and tax evasion, however transactions between Jeunesse and its (mainland) distributors additionally fully keep away from the Chinese language tax system.
Both method, it’s fairly unlikely Jeunesse company isn’t conscious of this.
For reference, these caught smuggling Jeunesse merchandise into China face a jail time period of as much as ten years. On the company facet the tax penalty is calculated at one to 5 occasions the quantity of tax owed.
Up to now I’m not conscious of Jeunesse addressing the Chinese language seizures or arrest of Robin Lee in public. No less than not in English.
That is Jeunesse’s brilliance: When an issue happens, distributors and Chinese language administration take the blame. All Jeunesse need is gross sales efficiency.
Subsequently it isn’t stunning that they insist that the corporate has by no means operated within the Chinese language mainland market.
Remarkably, Robin Lee continues to be prominently featured on Jeunesse’s web site as President of Better China.